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When a company issues bonuses to employees, those employees expect to receive their bonuses each year. Unfortunately, companies sometimes must take away bonuses to cut down on costs, especially during recessions and other slow periods of business. Telling employees that they will no longer receive bonuses is best done by remaining personable and considerate. Employees will naturally appear upset, so relaying the message amiably cushions the blow.

1.

Call a meeting with all employees. Meeting with employees in person lends a personal touch to an unfortunate announcement. If your business consists of several locations, meeting with employees may be impossible. In that case, communicate via email.

2.

Explain that the company will not be giving monetary bonuses for the current year. Tell the employees that you did not come to the decision lightly, and you understand everyone who has received a bonus in the past expected one for the current year as well. Sound compassionate and caring; don't make the announcement in a monotone voice with stone-faced expression.

3.

Stress that the decision to end bonuses is strictly business related. You don't have to go into all the details, but do explain that employee performance did not factor into your decision. Even if the reasons related to the decision were because of lower production and lower performance than in recent years, do not mention that to the employees. Placing a portion of the blame on employees for vanishing bonuses effectively says, "It's your fault," regardless of how you try to spin it.

4.

Reassure employees about the company's health. When a company takes away bonuses, employees may begin to think that the company is struggling. Those types of thoughts can lead to worsening performance, because employees become distracted and worried.

5.

Express your confidence in employees and urge them to continue working hard and trying to improve. When an employee hears that bonuses have been taken away, it's natural for him to feel unmotivated and sluggish. It's imperative that employees continue to work hard so that business doesn't slow down.

Tip

If your employees' performance is a major reason why you had to take away bonuses, address performance issues in a separate meeting.

References (2)

About the Author

Located in Pittsburgh, Chris Miksen has been writing instructional articles on a wide range of topics for online publications since 2007. He currently owns and operates a vending business. Miksen has written a variety of technical and business articles throughout his writing career. He studied journalism at the Community College of Allegheny County.

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Miksen, Chris. "How to Nicely Tell Employees They Are Not Getting Bonuses." Small Business - Chron.com, http://smallbusiness.chron.com/nicely-tell-employees-not-getting-bonuses-21530.html. Accessed 14 September 2019.

Miksen, Chris. (n.d.). How to Nicely Tell Employees They Are Not Getting Bonuses. Small Business - Chron.com. Retrieved from http://smallbusiness.chron.com/nicely-tell-employees-not-getting-bonuses-21530.html